It is never too early for anyone to engage in estate planning. Estate planning saves your family a lot of trouble when you’re gone. You can decide what will happen to your assets and possessions after death or mental disability through estate planning. When you plan beforehand, you can potentially minimise taxes and other costs your beneficiaries will have to pay based on the value of your estate. This will also help avoid confusion among family members during the long process of probate.
In order to make sure that your wishes are properly recorded and your assets are appropriately distributed among your beneficiaries, employing a financial advisor will be most helpful. Here are some of the things you can do with the help of a financial advisor:
- Declaring your beneficiaries
- Structuring your estate plan in a way that minimises your taxes
- Keeping a record of all your wishes and plans and how you want them to be carried out
- Writing your will
- Assigning power of attorney to a person you trust in case you become unable to manage your financial affairs
- Having a living will to carry your wishes while you are still alive, but can’t function mentally or physically
- Naming your healthcare proxy that will make medical decisions on your behalf
- Setting up a trust if applicable
There are many benefits in estate planning and if you think estate planning is only for the wealthy, you are wrong. The primary benefit of estate planning is to reduce taxes and avoid probate and administration costs among your beneficiaries. Without an estate plan, the state will usually decide how your assets will be distributed to your beneficiaries without considering your family’s circumstances or even your own wishes.
To help you get started, here’s a checklist of the top things you need to consider when planning your estate in Sydney & Australia:
- Make a list of your assets. Review your existing physical and non-physical assets. For physical assets, you can include your house, any property that you own, cars, and even expensive pieces of art.
- Review your retirement plans. You must check your retirement plans including your pension, annuities, superannuation, and insurance policies. You have to check if your premiums are paid properly and everything is up to date. You also have to make sure that you have nominated beneficiaries for each in case of death.
- Make a list of your liabilities. Estate planning is not just about listing your assets and appointing heirs. You have to make sure that your liabilities are also taken care of in case of death and will not be a burden to your family. List your liabilities such as home loan, car loan, personal or business loans, and even credit card balances. Once you have your list, you need to state how you want your liabilities to be paid off at the time of your passing.
- Write your will. After having a detailed list of your assets and liabilities, you now need to make a formal will. You need to clearly declare how you want your assets to be distributed after paying your liabilities. You can also declare here your wishes and other special requests.
- Appoint an executor. An executor will make sure that al the details in your will are carried out when you’re gone. Your personal financial advisor can act as your executor, since it is best not to appoint a beneficiary.
- Set up a trust. You can choose to set up a trust, especially if you have a large estate. You can manage the trust while you are alive or appoint a trustee who will do it and carry out your wishes after your death.
- Sign a power of attorney. In the event of your death or if you are medically unfit to decide for your affairs, the power of attorney gives a legal right to a person to act on your behalf.
- Prepare advanced medical directive. This document should be part of your estate planning. Advanced medical directive gives instructions on how you want to be taken care of when you don’t have the capacity to make decisions yourself.
If you need a financial advisor in Sydney to help you in estate planning, you can contact us anytime at 02 9003 0611.